DeFazio said in his letter that "the easiest method to raise the $700 billion from Wall Street is a securities transfer tax, a tax that has a negligible impact on the average investor and provides a disincentive to short-term traders." The current crisis is not caused by short term trading, but by excessive risk taking of long term traders/investors. What the hell is in his mind? Imposing a 70% tax on gains from home sale makes more sense.
AlterNet is supporting it too: http://www.alternet.org/workplace/100223/10_ways_to_bail_out_wall_street_(and_main_street)_without_soaking_taxpayers_in_debt/
Reality doesn't matter. "They hate us for our freedom." "Ya mean pay for it from somewhere other than my taxes? Sounds good to me."
Unfortunately, politic is not about rationality and/or logic. It's all about pleasing the majority. The problem with a transaction tax (for us daytraders) is that the cost is invisible. There is no "this costs us 50bn a year" showing up in the budget. You can't see it anywhere, it's just a hidden cost, unfortunately.
why does anyone even bring this stupid ridiculous subject up? the chances of this ever passes are zero. this would not just affect day traders but 20-30 million americans who trade 2-20 times a month. it would bring liquidity to a complete halt and spreads would widen to $'s and vol would fall 90% thus putting 3-5 million people out of business from stock brokers to 90% of all brokerage firms gone. the market would fall 50% immediately.
What a complete moron. He is essentially saying "We don't want the taxpayer to pay for the bailout so what we are going to do is tax people in other ways and try to make it seem like it is not actually taxing the taxpayer. Don't tell anybody that the taxpayers actually buy stock sometimes or that liquidity will plummet so they get screwed over by the bid-ask spread. Furthermore, the great thing about this plan is that this tax will remain in place even after we have recouped our bailout losses! Brilliant! That way we can take advantage of investors day in and day out for all eternity!"
How can you be so sure considering what has already taken place in the financial markets? Socialism/communism here we come.
well if it ever passed and the mkt drops 50% or more and vol collapses 80% then the country's in a depression and the avg citizen will storm congress . nothing will matter then. anythings possible but the liklihood of it happening are as close to zero as one could get. if it happens i hope all day traders saved there money and can open another business
You're wrong. It will be less liquidity, but far from your figures. The market won't drop by much either. Why should MSFT drop double digit percent just because there is an entrance fee of .25%? I would certainly be buyer if it drops! As the situation is now I'm fearing what will happen. Typical when we're in a mess free markets and capitalism gets the blame.